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- Eurozone economy suffers steepening decline at start of 2021
Eurozone economy suffers steepening decline at start of 2021
According to the report from IHS Markit, eurozone business activity fell at an accelerated rate in January as companies continued to struggle amid the ongoing pandemic and related restrictions. The rate of factory output growth weakened to the slowest since the recovery began and the service sector saw output fall at the second-fastest rate since May.
The headline flash Eurozone Composite PMI fell from 49.1 in December to 47.5 in January, indicating a third successive monthly decline in business activity and the steepest deterioration since November. However, the last three months have seen the PMI remain higher than during the initial months of the pandemic in the spring of last year, suggesting that the economic impact of the second wave of virus infections has so far been considerably less severe than in the first wave. The worsening performance in January was broad based across the eurozone, albeit with marked variations.
The greatest signs of resilience amid the ongoing pandemic continued to be evident in manufacturing. Eurozone factory output expanded for a seventh consecutive month in January thanks to sustained growth of new orders, exports and backlogs of work. Although the overall pace of factory output growth slowed to the lowest in seven months, it remained among the highest seen over the past three years.
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